Ask The CMO: Claudio Franco On Placing The Consumer At The Heart Of All Decision Making

We are in an age where everyone is a customer be they consumer, business, or employee. The challenge for smart brands today is to find ways to act with broad purpose in a manner that inspires, but also provides the runway for individualized and emotionally informed experiences. As we approach 2019, the need for emotional intelligence married with agility continues to mount. As such, I thought it would be interesting to speak to a startup to hear thoughts on what any brand, big or small, should keep in mind to remain nimble, empathic, and engaging in the year ahead.

A Conversation with Gympass CMO Claudio Franco on Removing Emotional Barriers + Placing the Consumer at the Heart of all Decision Making

For my latest Ask the CMO column, a series dedicated to analyzing the latest trends and disruptions in the marketing landscape, I had the pleasure of speaking with Claudio Franco, Global CMO of Gympass. Claudio is a marketer with many years of experience across disciplines having worked at places like Roland Berger, P&G and Mind Lab. We spoke about everything from the company’s recent rebrand, to why connecting with consumers emotionally is vital, along with best practices for any brand to consider, big or small, when launching anything in today’s environment:

Billee Howard: I’d love to start with your general thoughts on the changing face of marketing and then bridge over to how you're dealing with it all at Gympass?

Claudio Franco: Great. The marketing space is going through a true revolution. Marketers now have the power to personalize experiences with data, messaging and positioning for a wide variety of consumers. A.I. and Big Data in automation means that we can take traditional marketing strategies and tactics to new heights. I think this is a critical piece of the ongoing transformation that I see right now.

The second piece, which is critical for our business and our industry overall, is not only addressing consumer’s functional barriers, but also working on their emotional barriers, or what we refer to as “gymtimidation”. When we think about changing lifestyle habits, working through emotional barriers can actually drive long-term growth for companies, products and brands. To do this, you also need to understand the marketing landscape at a system level, uncovering patterns in data. However, at the same time, it is vital to not forget who is on the other side of the computer or app -- a human being that has both functional and emotional barriers. Sometimes these factors are at war, but combining and targeting both makes for a compelling strategy, messaging and brand positioning.

Howard: It's great that you've hit on a lot of things that I'm passionate about, particularly emotional intelligence. We can get to that in a little bit, but before we do that I'd love to hear how you’re approaching marketing at Gympass, recognizing the environment you’ve just articulated?

Franco: A unique challenge that we have is due to the makeup of our business model. We deal with three very unique stakeholders. First, we have fitness partners, who are most of the time looking to capture existing demand. For us though, it's not just about delivering efficiency to them, it’s really about helping to increase their penetration in the market and generate new demand. Today, roughly 70 to 80 percent of our users have never been to a gym before or did not have a membership in the last twelve months. So, our job is to add new users to the industry, specifically users that might not have been actively looking for a new membership.

Our second key target is companies, particularly as they are struggling to engage employees, with a heightened focus on millennials in the United States and in some countries in Latin America. They're also struggling to manage healthcare costs and most importantly, how they can provide a comprehensive wellness experience for all employees. This issue is relevant enterprise-wide from entry to C-level, as well as blue collar to white collar workers. So, it is fun for us to figure out how to effectively solve all the pain points of these stakeholder groups.

Then there is a third element, which is the end user, defined as employees of client companies. When we consider that only 20 percent of people in the United States are physically active, our challenge is to find the other 80 percent of the market and inspire them. We need to connect with them in a meaningful way to get them to change their lifestyle, start looking at their fitness routine and incorporate physical activity into a world that more and more is limiting their ability to exercise. It's a big challenge for us to motivate new habits, while also working on all of the emotional barriers that prevent them from starting a new fitness routine in the first place.

Doing this is very challenging as we need to have all communications working in sync. As a result, we have rooted our strategy in educating the market. We are working to use data to personalize what is meaningful on an individual level. We believe that if users can find a workout that they love, then they have a higher chance of sticking to a routine. Part of this also entails educating users on how to work within emotional barriers when they visit a gym for the very first time. I don't want to spend a lot of time talking about my passion here, but it's helpful to understand how we're approaching this unique problem with data, while addressing emotional barriers by combining all three stakeholders of the business model.

Howard: Not at all. As I said I'm pretty passionate about all of that myself. With that in mind, you know the whole idea of needing to connect on a deeply emotional level, are you using a sense of brand purpose or broad aspirational message to connect with people to overcome some of those challenges you mentioned?

Franco: Of course. Three months ago, we completed a rebranding and repositioning of Gympass. We started with a clear mission statement to defeat inactivity, and the company as a whole went through a tremendous transformation. We’ve had to review the entire communications stack to move in lockstep with our brand shift, ensuring that all assets reflected our new positioning with a joyful tone of voice, along with colorful imagery, something that we found is not the norm within the sports industry.

Everything about sports is performance driven, about going beyond your own limits. We needed to reimagine this through the lens of fun and inclusivity, to rebuild the relationship between people and physical activity. This shift is difficult to make because in all of our research, consumers associate sports with being the best or breaking records, which isn’t always true. By rebuilding the relationship people have with these activities, they can start considering behavior changes.

In Mexico, for example, 70 percent of the population today is overweight, one third is obese, and the country is expected to spend more than one billion dollars just fixing the outcomes of such an unhealthy population. Clearly, we have to shift the way people view physical activity because right now, the way it’s positioned is not creating an active population. So, in summary, what we are doing is creating a communication platform that works well not only for Gympass, but for our fitness partners as well.

Howard: I think that makes a lot of sense, and it leads me to another question which is something I think a lot of brands are struggling with, which is how to balance a broad aspirational message that brings people in and gets them excited about the brand, while also has the ability to be tailored and very hyper-targeted in an individualized way. It’s kind of a paradox if you will. How are you approaching that challenge at Gympass?

Franco: I love that because it drives our daily routine here. We are all about helping people find an activity to love. That represents our broader purpose. It’s emotional, aspirational and drives all of the initiatives we execute to help users overcome emotional barriers.

Everything we build ladders back to the idea that everyone can find an activity to love. There is a lot of research and data to back that. We realize that some users were trying a lot of different workouts to find one that works for them. This works well with our discovery platform that can help you to find these activities.

If we don't know exactly what the end user’s goals are, their aspirations, where they live, where they work, if they prefer to work out close to their home or office, we fail. We cannot afford to be ineffective in recommending something that does not fit into their lifestyle. To do this, we are working really hard to get as many fitness partners into our network so we can embrace all of the profiles that our users represent.

Howard: That's well said and very interesting. You have basically said that to Gympass, virtually everyone is a customer. You're selling to businesses, you're selling to consumers and in essence you're also selling to employees. How do you achieve customization and scale at the same time?

Franco: Interesting point, because we need to scale and scale really fast, and that is really hard to do if you want to customize every single interaction with the customer. I think there are two main aspects of that. The first one is the realization that the world is more global than we ever thought. For example, when speaking to an HR leader in the United States, in Spain, or in Mexico, they're all facing very similar challenges. The nuances we see here are more industry-focused. With end users, it's pretty much the same, but what's going to be different is what is trending in any given market, especially across boutique studios. Gyms overall face more or less of the same challenges, and that makes it easier for us to have a solution for them.

We need to treat each situation individually and respond as best we can, in real-time. A combination of big data, recommendation algorithms and our partners help us to better understand consumer behaviors and trends on a local level. That's something we are investing a lot of resources and time into. With this, we are building the right ecosystem that can quickly react to the fast-moving consumer population worldwide.

Howard: Gotcha. Can you share a best practice that you would recommend to any brand, big or small, when launching a company, product or concept in today's market?

Franco: I've seen a lot of brands and companies fall in love with new technology, new trends, marketing automation, social media, et cetera. However, what we should never forget is that long-term growth and relationships are not created based on what is trending now. Those things can only yield short-term results.

If you understand your consumer well and place them at the center of your decision-making process, you will always make better decisions. You’ll make decisions that are more aligned to your long-term goals, rather than the short-term, which might be achievable by simply applying technology to whatever you are already doing. My advice for any company looking to launch a new brand and achieve long-term growth is to always keep the consumer at the center of the decision-making process.